Sovereign debt to be included in regulator review

THE Financial Regulator is set to introduce a sovereign debt element to its upcoming reviews of the capital needs of Irish Life & Permanent, Anglo Irish Bank and Irish Nationwide, the Irish Independent has learned.

THE Financial Regulator is set to introduce a sovereign debt element to its upcoming reviews of the capital needs of Irish Life & Permanent, Anglo Irish Bank and Irish Nationwide, the Irish Independent has learned.

The regulator began its Prudential Capital Assessment Review (PCAR) programme earlier this year, reporting results for AIB and BoI in March.

The exercise on those two banks made no reference to sovereign debt, however the regulator is understood to have decided to introduce the sovereign element to all future tests.

The decision follows yesterday's publication of Europe-wide stress test results, which tested banks' sovereign exposure and published the full sovereign exposures of each tested bank including AIB and BoI. The publication is expected to ease market concerns.

The regulator's PCAR review of IL&P is understood to be "well advanced" with results expected over the coming weeks. Reviews of Anglo and Nationwide are awaiting the European Commission's ruling on their business plans.